Digital Omega Tech Alpha

Digital Omega Tech Alpha (DOTA), a provider of bespoke software solutions and after-sales support to consulting companies and direct customers alike, has enjoyed a great deal of business success in the past 16 years, including not only a loyal customer base but also a loyal US workforce. DOTA is looked upon as an important partner by many of its clients. DOTA employs over 90 people in their Providence, Rhode Island office. In 2002 DOTA opened up an office in Delhi, India, and started actively off-shoring important design and programming work to that office.

After the first successful year, some problems are emerging in the office in India. The high demand for talented software engineers in India has lead to a very high turnover in staff in the Delhi office, including the Manager, who incidentally is the third to leave in four years. Clearly this problem needs to be addressed as certain projects have been stalled due this issue and DOTA can not afford to lose these important clients. The Software Engineering Group (SEG) is the largest Department of DOTA.

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All the programming code for client software is either written or tested in this department. In addition, the group offered on-line and telephone based software support to many of the clients. SEG managers also interfaced with the Delhi office in India and made decisions about what work needed to be outsourced. Once every six months, a senior SEG manager visited the Delhi office to help set up quality controls and to assist in recruitment of local software engineers.

The workforce in SEG is paid way above the average wage for their skills, however, the salaries of the local software engineers at the Delhi office were much lower and were tied to the markets in India. Due to rapid increases in wages of software engineers in India over the last five years, it had become critical for DOTA to keep up with information on the labor markets and wage rates in that country. This seemed to be the major issue until the president of DOTA found out that a number of his female employees viewed the culture at DOTA as being hostile to women and a third female employee had filed charges of sexual harassment.

In addition, the ongoing Equal Employment Opportunity Commission (EEOC) investigation appeared to be broadening to examine recruitment and selection practices at DOTA. These complaints were coming from the SEG department, which has 64 people (53 males and 11 females). Forty-seven of the males were white and six were minority males (Of the 6 minority males, three were Asian, one was African-American, and two were Hipic). In addition, there were 11 females in the department (five were white, three were Asian, two were African-American, and one was Hipic).

So in addition to the issues currently faced in India it seems that DOTA has more pressing Human Resource Management (HRM) issues to deal with in the US, especially with regard to their Software Engineering Group (SEG). This is the main challenge facing DOTA at present. Analysis of DOTA The situation DOTA faces in India is fairly easy to explain. It is based on the basic laws of economics. There is an increasing demand for talented software engineers; hence their price (salary offered) increases accordingly.

This has meant that competing companies and perhaps other firms too are offering higher compensation in order to secure skilled staff. Understandably this has led to the good engineers to look elsewhere for higher paid work. The Indian operation is also fairly new (established in 2002) so the inherent company loyalty that long-term employees usually acquire will not be present here yet. Again this is also influenced by economic and environmental changes – company loyalty is now no longer as evident as it was previously, with many high-profile staff leaving companies to join competitors, as is widely reported in the media nowadays.

As we saw in the Background section DOTA pays their local US staff way over the norm, perhaps they need to reduce this and allocate some of the resulting monies to attracting the best software engineers in India by offering more competitive salaries. DOTA needs to keep up-to-date with the latest trends in this industry in India. DOTA also needs to looks at its strategic retention and turnover in this region. Where are they going wrong? They need to have a healthier turnover rate where the weaker staff leave but the talented workforce stay.

This can be tackled by implementing reward and incentive schemes for good performance for example. Some turnover is good for a firm – it keeps them on their feet and gives the new company a fresh face. Too much turnover, however, is demoralizing for the rest of the staff and may have a negative impact on client satisfaction if it is cited once again for a project being delivered late. The potential HR crisis it faces in the US at SEG can not be explained by the same methods.

These issues involve organizational socio-cultural issues and people rather than economic forces and need to be studied in detail in order to understand them and provide guidance towards possible solutions. Three female employees in the SEG department have filed charges of sexual harassment with the EEOC. So rather than having one disgruntled employee taking things way too seriously this has now become a chain of events that is quite likely to affect DOTA seriously as these accusations have also led to the expanding of the ongoing EEOC investigation to further look into recruitment and selection practices at DOTA.

For a company of DOTA’s small size (in number of employees, and the corresponding number of women) it is quite unusual for there to have been three sexual harassment cases all in the same department (SEG), which only has 11 women, in the timescale of one month. Therefore it is not surprising that the EEOC has decided to expand its investigations into the firm. DOTA must treat this as an urgent and highly important issue, not only within the scope of the HR issues but within the company as a whole entity. Hence this may impact on DOTA’s future corporate strategy.

Another point to note is that DOTA’s HR Strategy and the corporate strategy seem to be disconnected. DOTA was established 16 years ago and the current HR Director was hired 8 years ago but there is still a major discrepancy by how some of the senior staff view the HR Director and how she believes the HR department should be recognized. Let’s look at the cases being investigated. Do we have concrete proof? The EEOC defines sexual harassment as a “form of sex discrimination that violates Title VII of the Civil Rights Act of 1964.

Title VII applies to employers with 15 or more employees, including state and local governments. It also applies to employment agencies and to labor organizations, as well as to the federal government” (EEOC, 2007) “Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance, or creates an intimidating, hostile, or offensive work environment” (EEOC, 2007).

So let’s apply this to the issue that has arisen in DOTA. The Manager at SEG admits that there is some “horse playing, nude posters, and some loose jokes and humor” within the department and has been so for a while. Subsequently he adds that a joke e-mail was sent to the whole department, which included a couple engaging in what he calls the “final stages of a romantic evening on their honeymoon”. This apparently insulted some of the females, particularly the “Asian” ones. So from this we can say that this may not only be limited to sexual discrimination but also racist views by the SEG Manager.

There seems to be an inherent cultural issue here as the SEG Manager is not taking these accusations seriously and when confronted with this in a meeting between the President, the HR Director and himself he repeatedly calls the HR Director “sweetheart” and “honey”. This implies that he is unable to really appreciate the seriousness of these issues. If we look a little deeper into the company’s culture we discover not only sexual harassment issues but discrimination and diversity problems too.

We learn about one case where is heavily overweight woman was rejected for a job, even though she passed the required aptitude test, but the SEG Manager believed that she was not appropriate for the job after he witnessed her struggling to climb three flights of stairs and later on “swearing at the candy machine” because it swallowed her money. The candidate in question later complained to the HR Director, which the SEG Manager found inappropriate too. This could become another potential issue for firm as the EEOC are investigating their recruitment practices too.

They need to check whether the above applicant could be covered by the Disability Act because of her size. If she is it would only compound their HR issues. There is another case of a Vietnam War veteran in a wheelchair who was rejected for the job simply because the company has no wheelchair access facilities. Now this is a grave matter as the Disability Acts clearly states that every company with 15 employees or more should provide this facility. The final HR issue we need to at is the diversity situation.

As we saw above DOTA employs 53 males, of which 47 are white and six are of minority groups. This looks to be very skewed. There are only 11 females with equal diversity amongst race. The EEOC are sure to ask about the validity of the special programming aptitude and problem solving test and why it requires a 95% pass rate for the recruitment decision process! They will also address the question of why so few women are employed at DOTA. Under the “Title VII adverse impact” law the company has to prove how their test actually relates to performance in the workplace.

Can DOTA provide this proof? Again we need to look at the basic law of economics too – if there is simply no supply of women to perform these particular jobs then the company could explain why there is such diversity within the firm. In summary, these serious HR issues could potentially destroy the company. If news of this spreads, either through word of mouth or in the media it will give DOTA a bad reputation. This is likely to impact not only the customers’ perception of them but may lead to less people applying for vacant positions as well.

In additional to this there are huge potential legal risks that could force DOTA to close down (as it is a small company with perhaps not enough cash liquidity to pay for lawyers, settlements etc. ). They are losing good employees in India already but with bad publicity and the resulting poor reputation this may happen in the US too. This applies to their customers too – once word gets out about these issues the clients may lost their trust in the company and terminate their working contracts and go elsewhere for the similar services.

So really the future of the company is in jeopardy here and they need to take some immediate strong actions to combat this. Evaluation of DOTA’s HR Policies and Strategies Looking somewhat deeper into the HR Policies and Strategies at DOTA we see that the prognosis is not good. The company does not seem to have concrete HR policies in place, and if there are they are certainly not aligned with the current company strategy, particularly the SEG department. From an extreme point of view HR is not even really viewed as part of DOTA at all.

This can be shown by the fact that HR has no input whatsoever into the 95% required pass rate of the aptitude test that the SEG department uses for all recruitment of new staff. The SEG Manager also shows a complete lack of respect for the HR Director when he states “Look honey. Don’t tell me what I can or can’t do in my department, OK. We started this company. We make the money. We work hard for the money. Give us some respect. My department generates the revenues. Do you know the difference between line managers and staff managers? I am a line manager. You are staff Lisa.

Your job is to assist and advise and then keep quiet, OK. ” This proves that HR is not taken seriously by some senior members of staff within DOTA and that the HR department is therefore seen as the old ‘stereo-typical’ traditional incompetent support department, which deals only with admin issues such as payroll. The SEG Manager also makes it clear that his department’s focus is on doing the best possible job for the company’s clients and the quality of this work is responsible for the repeat business the company enjoys. He says nothing at all about the talents of his staff or their job satisfaction.

He even goes as far to accuse the HR Director of being partly responsible for the sexual harassment problems as she “has been on his back to diversify” and “his boys” have not been used the female presence in the office until now. The President of DOTA is much less direct in his views but the fact that he is completely perplexed by the three cases of sexual harassment being filed in the company also shows that he is not taking HR strategy as seriously as he should be doing and this results in the meeting where much is accused but little is resolved.

The President, however, is at least aware of the grave consequences this could have on the firm unlike the SEG Manager who is quite adamant that he will not be intimidated by the EEOC investigation. The HR Director is very aware of the negative potential consequences to the company of this investigation and is appealing for help to the President in resolving these cases. She is up-to-date on all HR trends and recognizes that something urgent needs to be done to get the company out of this situation.

She also realizes that it is not just the sexual harassment cases that the company needs to look at, but also its recruitment policies (referring again to the aptitude test she knows little about; she is worried about explaining its validity to the EEOC) and the culture of the company in general. There seems to be a lack of values and culture statements throughout the company, especially within the SEG department which seems to operate in a world of its own.

It’s also not clear where HR sits in the midst of all this – is it as a separate support function to all of the departments or does it sit above those departments in line with senior management and other operational departments such as Corporate Finance for example? There is no evidence of an organizational structure at this point, so I will make the assumption that HR does not report directly to the President at this point in order to be able to make the following recommendations. Recommendations for DOTA

If I were an outside consultant I would make the following recommendations to DOTA, based on my understanding of their issues both in India and in the US. All the recommendations are based on the one assumption that at present HR does not report into the Top Level Management (TLM) at DOTA and is not involved in corporate planning or strategy decisions. Let’s look at India first. The company seems out of touch with the current compensation trends in India for Software Engineers. This should be addressed as a priority. Sending somebody out there once in a while for a week will have no great impact.

What DOTA in India need is to have their own HR representative on the ground who is fully up-to-date on local trends and issues. This person should report into the TLM in the US and therefore be able to action things and resolve issues quicker than at present. The staff in India need to also feel that they are part of the DOTA company, its culture, its values etc. and not just outsourced “cheaper” staff. There may have to be some relocation of finances to achieve this – perhaps by lowering the entry level wages of new recruits in the US and spending this on the retention of talented staff in India and training the new US recruits in-house.

DOTA also needs to implement succession planning (i. e. who responsible for delivering a project if the current project manager leaves). Again this will involve including HR at the corporate strategy level to achieve this. The consistent theme throughout is that HR need to be part of the corporate strategy. Lets add the problems in the US to this equation: HR should also become a partner in strategy executions by impelling and guiding serious discussions of how the company should be organized to carry out its strategy. Creating the conditions for this discussion involves four steps.

First HR would define an organizational architecture by identifying the company’s way of doing business; in other words it should define a corporate culture. Next HR must be accountable for conducting an organizational audit. The third role for HR as a strategic partner is to identify methods for renovating the parts of the organizational architecture that need it. Fourth and finally, HR must take stock of its own work and set clear priorities. In their new role as administrative experts they will need to shed their traditional image and still make sure all routine work for the company is done well.

HR must be held accountable for ensuring that employees feel committed to the organization and contribute fully. They must take responsibility for orienting and training line management about the importance of high employee morale and how to achieve it. HR must also be responsible for training the workforce about what is and what is not acceptable business behavior. The new HR should be the voice of employees in management discussions. The new role for HR might also involve suggesting that more teams be used on some projects or that employees be given more control over their own work schedules.

The new HR must become a culture change agent, which is building the organization’s capacity to embrace and capitalize on change. They don’t execute culture change but they make sure it is carried out. The new mandate for HR requires dramatic change in how HR professionals think and behave and this will positively impact how they are perceived by other member of staff. Investing in new HR practices is another way to let the organization know that HR is worthy of the company’s money and attention.

HR will have to ensure that the company adheres to sexual, racial and disability discrimination policies by making it clear that such behavior will not be tolerated at any level. Finally, the most important thing managers can do to drive the new mandate for HR is to improve the quality of the HR staff itself. Senior executives must get beyond the stereotypes of HR professionals as incompetent support staff and unleash HR’s full potential. These are long-term objectives and recommendations but it still leaves DOTA with the immediate challenge and that is how to deal with the three sexual harassment cases.

Firstly the validity of all these cases must be established by tangible evidence. Also we need to look at other factors – are the women unhappy in general or do all three have a valid case for going to the EEOC? Are there any salary discrepancies which may cause discontent? A recent study from the UK shows that police officers (who are mainly male) are paid way more than nurses (who are mainly female) whilst both have demanding public sector jobs (PT, 2006). This is just an example but the compensation system in the company may need to be re-evaluated too.

What if all three EEOC cases are valid and the company is taken to court? What recommendations should we give then? Firstly, if these cases were all taken to trial the public relations disaster that would face DOTA may be sufficient enough to sink the company alone. If DOTA were to survive the PR problems it may face millions of dollars in compensation pay-outs. Therefore my immediate recommendations would be involve all three women in discussion, make sure appropriate apologies are made and ensure all is being done to avoid repeat situations.

If this does not work – it would be best for DOTA to settle out of court so as to limit the damaging PR implications. It is now widely reported that many cases of this magnitude are being settled in private (PT, 2007). Conclusions HR has never been more necessary. The competitive forces that we face today and will continue to face in the future demand organizational excellence. To achieve this excellence by focusing on learning, quality, teamwork, and reengineering are driven by the way organizations get things done and how employees are treated.

To achieve this excellence we look at the work of HR. By designing an entirely new role and agenda that results in enriching the organization’s value to customers, investors and employees, HR can help deliver organizational excellence by helping line managers and seniors move planning from the conference room to the market place, by becoming an expert in the way work is organized and executed, they should be a representative for the employees and finally by helping the organization improve their capacity for change.

The responsibility for transforming the role of HR belongs to the President / CEO of every company and to every line manager. HR will help organizations meet competitive challenges such as globalization, profitability through growth, technology, intellectual capital, and the greatest competitive challenge company’s face, adjusting to nonstop change. HR’s new role would be able to quickly turn strategy into action; to manage processes intelligently and efficiently; to maximize employee contribution and commitment; and to create the conditions for seamless change.

HR should also guide staff with their career path and researching certain courses and learning institutes best suited to their work to develop all the necessary skills to achieve high results in the workplace. Encouragement is a big factor in job training and career courses to stimulate staff in their current role or to further their career options within the company. With today's workforce becoming increasingly diverse and organizations doing more to maximize the benefits of the differences in employees, HR Managers are evolving from the "old school" sideline players to the front-line fighters.

APPENDIX I – References • EEOC - http://www. eeoc. gov/ (Retrieved 24th April, 2007) • Personnel Today – 20th April 2007 - City sexism tribunal is tip of iceberg, says lawyer - http://www. personneltoday. com/Articles/2007/04/20/40224/city-sexism-tribunal-is-tip-of-iceberg-says-lawyer. html (Retrieved 24th April 2007) – (PT, 2007). • Personnel Today – 28th November 2006 - Royal College of Nursing claims low pay proves society is still sexist - http://www. personneltoday. com/Articles/2006/11/28/38316/royal-college-of-nursing-claims-low-pay-proves-society-is-still. html (Retrieved 24th April 2007) – (PT, 2006).

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